Sunday, June 07, 2009

Mail Bag - Gap Scan

I noticed on your newsletter you said ANF from the gapper scan, are you referring to the Trade Ideas Scanner? If so, can you tell me which scan parameters work best?

Again thanks for your help.

Hi E,

Yes, I'm referring to the Trade-Ideas scanner. Basically, I started off with the TI pre-configured scan entitled "Stocks down big in pre-market" and I adapted to my personal needs. In the window specific filters I set a min . price of $6.00; min. daily volume of 200,000 shares/day; with a max up from the close of -5%. In the symbol lists, I exclude all ETFs, Holders, Ishares and special symbols.

In summary, I'm looking for a wide gap from previous day close, like an earnings gap or story stock. The settings I'm using limit the number of hits to a manageable level, and eliminates all those ETFs. When trading gaps, you want to focus on the momentum plays, which mostly involve individual stocks. Measure quality by number of days and check the daily for a good idea of support/resistance levels. In the case of ANF, although the number of days was few, the daily chart was setting up for a bearish island reversal because the gap was wide.

Trade-Ideas is a windows based software. I run it with both Windows XP and Vista on my PCs. I'm not familiar with Mac. But if your MAC thinks it's a PC, technically, it should be compatible with Trade-Ideas.